Digital Marketing Surges Forward

Unilever is the latest manufacturer to join the rush to digital marketing.

Consumers can display cell phone coupons (developed by Samplesaint, a Chicago mobile-technology firm) to supermarket cashiers, much as airline travelers currently can show airport screeners their digital boarding passes. The test will be in a ShopRite store in New Jersey, and will discount some of the giant packaged goods company’s top brands, Breyers ice cream, Dove soap, Hellmann's mayonnaise and Lipton tea. Customers visit Samplesaint.com to secure the coupons which are then sent to their cell phones. After the cashier redeems the coupon, it is deleted from the phone to prevent “double dipping.”

Mobile marketing currently stands at $3.3bn, and grew at 35% last year, but has tailed off to half that (17%) during the current slowdown. Cell phones seem the ideal coupon dispenser, since they are now seen by many consumers as the organizer and focal point of their lives. The intersection of digital couponing and supermarkets would seem to be a marriage made in heaven, since Icom (a division of Epsilon Data Management) claims 87% of survey respondents who use coupons redeemed them at grocery stores, as compared to restaurants (47%) and department stores (41%).

Supermarkets are fishing in the same waters, too: Randalls Food Markets (a division of Safeway) is partnering with Cellfire and Shortcuts.com to link cents-off offers to loyalty cards, and is also exploring cell phone couponing with the discounts registered at the store and automatically deducted during check-out.

The key to the success of these programs is simplicity, with current obstacles to greater use of cell phone coupons including the limitations on company websites that only allow for printed coupons, cell phone technology glitches that requires time-consuming and complex code entries, and the usual incompatibilities between different software and hardware. CVS/pharmacy is tackling this issue by launching a “coupon center” on its Web site that helps customers compile coupons, browse categories and share savings by sending e-mail alerts. Still, most marketing experts are skeptical consumers will embrace a technology that requires them to print out coupons or load them onto their cell phones before heading to the store.

But the potential to target coupons to receptive consumers is a Holy Grail for marketers, who have seen coupon usage skyrocket as “value” has trumped most other factors in purchasing decisions. Food Lion, for example, is running TV ads showing shoppers searching for “big game” value instead of touting outdoor grilling products as they normally would this time of year. Despite the huge usage of coupons by manufacturers and retailers, statistics show less than 1% redemption for most newspaper and print coupons.

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